Nigeria’s prosperity story seems to be a nominal one, whose large reserve of sovereign wealth has failed to cater for the significant population that occupies the country.
Indeed, Nigeria’s growth has not been productivity-enhanced. Instead, growth has been driven by inter-sectoral factor transfers with labour supply shifts from the less productive agricultural sector to the now booming services sector of the economy.
Unfortunately, the form of growth that these sectors have enhanced has been essentially exclusive, thus, attracting questions regarding the sustainability of this realised growth.
A crucial aspect of growth-exclusivity is the jobless prosperity dimension of output expansion, which the country currently experiences. Although post-pandemic effects had its toll on the Nigerian economy as gross domestic product (GDP) growth figures for the first two quarters of 2021 were severely affected, the country soon had a rebound, and aggregate output was bolstered. In Q4 2020, when the economy began to recover from the global pandemic, GDP growth was 0.11 percent, while Q1 2021 recorded a growth rate of 0.5 percent. However, by Q2 2021, GDP growth had reached up to 5.01 percent, while the current quarter, Q3 2021, records output growth of 4.03 percent, according to the National Bureau of Statistics (NBS).
Based on the growth progression, it is easy to assume that the country is doing well and that citizens are maximally and efficiently engaged in the production process and hence, duly receive dividends of their productive engagement. In reality, this is not the case.
Regardless of the distracting growth figures, Nigeria faces a massive problem of high unemployment and underemployment. The country’s capacity to create jobs and exhaust its excess capacity in competitive production continues to shrink as the day goes by.
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Indeed, the high unemployment rate, particularly among the youths, has been a major socio-economic challenge over the past decade, despite strong economic growth.
According to Bloomberg, Nigeria ranks second highest on the global list of unemployment rates. In Q2 2020, for instance, the country’s unemployment rate was 27.1 per cent, indicating that less than half of the country’s total labour force was gainfully employed in that year. Data obtained from Bloomberg showcases that a third of about 70 million-strong labour force were either idle or were engaged in jobs for less than 20 hours a week thus, making them unemployed. Another surveyed 15.9 million Nigerians worked less than 40 hours per week, therefore, making them unemployed.
With a decent rate of growth and a high unemployment rate, it becomes clear that the country’s employment elasticity to growth is low, and this scenario will worsen as population growth continues to increase. According to the United Nations, with a current population of about 200 million people and an anticipated over 300 million people by 2050, the number of job seekers will keep rising, especially as population growth keeps rising above output growth.
As of 2020, labour force statistics for Nigeria reveal that 60 percent of Nigeria’s working-age population are younger than 34 while the unemployment rate for those aged 15 – 24 was 53.4 percent, and those aged 25 – 34 was 37.2 percent, respectively, in the fourth quarter.
Also, the jobless rate for women was captured to stand at 35.2 percent, different from 31.8 percent for men. Hence, it is clear that Nigeria’s most idle population are youths, mostly females, and this trend will keep increasing as the years progress.
To interrupt this projected trend and chart a new course for Nigeria’s true and inclusive development, it is mandatory to re-think sovereign interest in education, gender parity, health and vocational or technical training for the teeming youth population. Appropriate investment directed at pro-educational interests at all levels, especially tertiary education, is required to provide highly skilled workers capable of fitting into modern services employment. Also, investing in vocational and technical training colleges is needed to increase the supply of skilled labour in traditional services.
The government must also prioritise making the economic environment labour-friendly by creating policies that increase the absorptive capacity of the various sectors to absorb workers. For instance, the development and technical upgrade of the manufacturing industry will go a long way to boost manufacturing output in the country through the increased productive engagement of labour services. Also, sufficient support for research and development, mechanisation, commercialisation of technologies and enhanced value chain processing in the agricultural sector is needed to increase participation and productivity. This will help to promote the cause for agri-business and other agro-allied activities in the country.
Encouraging the spirit of entrepreneurship among youths is another crucial role the government and other private interests must play to accommodate more inclusiveness in the country’s growth process. While numerous youngsters have been lost to the diaspora in search of greener pastures, current inhabitants can be encouraged to stay and develop the nation if programmes targeted towards post-secondary and post-tertiary trade interests are executed at minimum or no cost through government initiatives.
Also, improvement in the necessary infrastructure that supports the ease of doing business and the development of human capital is required to attract a good number of out-of-job individuals towards self-sufficiency and national development.
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